FG: We will NOT increase VAT, other taxes

Dwindling oil prices and falling revenue will not lead to increases in tax rates, the federal government has said.

Instead, focus will be on improved collection to increase revenue accruing to government.

This was disclosed at the end of the National Economic Council (NEC) meeting on Thursday presided over by Vice-President Yemi Osinbajo.

Briefing the media, Udo Udoma (pictured), minister of budget and national planning, said there was no plan to increase either the value added tax (VAT) or the corporate tax.

VAT is currently 5% while corporate tax is 30%.

Udoma said: “We do not intend to increase VAT rate at the moment but increase collection rate from 20 per cent.

“We will also not raise the corporate tax because we do not want to impose additional burden on Nigerians.

“Government’s position is, however, that those who make money and have not been paying taxes should pay.

“We expect at least 20 per cent increase in tax collection rate which is conservative in terms of our revenue projection.”

Udoma said government would “work closely” with the national assembly to meet the financing of the 2016 budget.

“With reference to the budget, one thing we are determined not to do is to cut any of those capital projects because we need them to stimulate the economy,” he said.

“We are going to work with the national assembly to see how we can get savings. One of the areas we are looking at is our cash call elements.

“The minister of state for petroleum is looking at how we can cut our cash call elements which is about N1 trillion by innovative financing.

“So he is discussing with some oil companies and looking for some innovative financing which might pick up some of the financing so that we reduce our financial output and contribution by the federal government… that will be a major saving which can be used to plug the gap particularly with falling oil prices.

“In addition, some of the capital projects, the various ministers for infrastructure are looking at how we can get private sector funding for some of them.

“For instance, the airports can be concessioned, we are looking at public buy back for some of the roads, looking at tolls. We have to be imaginative.

“But it is important not to touch the capital portion because that is important to revitalise the economy to get our people back to work, to get growth moving again so that we can get the four per cent growth.”